WEBVTT - Is there a right credit card for you?

0:00:00.219 --> 0:00:02.529
<v Speaker 1>You're listening to AC N A podcast.

0:00:04.920 --> 0:00:09.289
<v Speaker 1>Hello, I'm Andrea Heng. Welcome back to the Money Talks podcast.

0:00:09.489 --> 0:00:11.869
<v Speaker 1>I hope you've been enjoying the topics we've put out

0:00:11.880 --> 0:00:14.899
<v Speaker 1>on this podcast so far. If you haven't listened, we

0:00:14.909 --> 0:00:18.750
<v Speaker 1>highly recommend a limited series called This or that where

0:00:18.760 --> 0:00:21.569
<v Speaker 1>we got our guests to pick one financial option over

0:00:21.579 --> 0:00:25.809
<v Speaker 1>another from housing to cars to lifestyle packages. We also

0:00:25.819 --> 0:00:26.549
<v Speaker 1>took a look at

0:00:26.620 --> 0:00:30.790
<v Speaker 1>alternative investments that people are really getting into, namely find

0:00:30.799 --> 0:00:35.450
<v Speaker 1>watches and find wine. Today, we want to talk about

0:00:35.459 --> 0:00:38.919
<v Speaker 1>credit cards. Now, if you are not careful, they can

0:00:38.930 --> 0:00:42.269
<v Speaker 1>be a double edged sword and the debt can build up,

0:00:42.279 --> 0:00:46.369
<v Speaker 1>but they also provide convenience and a fuss free way

0:00:46.380 --> 0:00:48.250
<v Speaker 1>to even save money

0:00:48.500 --> 0:00:51.299
<v Speaker 1>quite the conundrum, right? So I know a lot of

0:00:51.310 --> 0:00:54.080
<v Speaker 1>people who have applied for the best credit cards out

0:00:54.090 --> 0:00:57.130
<v Speaker 1>there in the market want to rack up miles another

0:00:57.139 --> 0:01:00.810
<v Speaker 1>one for cash back redemptions. Even a third card for

0:01:00.819 --> 0:01:03.310
<v Speaker 1>extra perks like being a woman and being in a

0:01:03.319 --> 0:01:08.709
<v Speaker 1>certain salary bracket, maybe even 1/4 because its sexy color

0:01:08.720 --> 0:01:14.730
<v Speaker 1>represents exclusivity. But what I'm really wondering is, is this

0:01:14.739 --> 0:01:17.330
<v Speaker 1>all even necessary

0:01:17.599 --> 0:01:20.690
<v Speaker 1>to answer these questions I have with me a lie.

0:01:20.699 --> 0:01:24.220
<v Speaker 1>He is General Manager for Singapore at Money Smart Group.

0:01:24.230 --> 0:01:26.849
<v Speaker 1>Welcome to Money Talks. Thanks

0:01:26.860 --> 0:01:28.649
<v Speaker 2>Andrea. Ok, thanks for having me

0:01:28.660 --> 0:01:31.760
<v Speaker 1>first. I must ask you how many credit cards do

0:01:31.769 --> 0:01:32.290
<v Speaker 1>you own

0:01:32.339 --> 0:01:35.669
<v Speaker 2>personally? Just one? Wow, just

0:01:35.680 --> 0:01:38.849
<v Speaker 1>one. Ok. What kind of credit card is this one

0:01:38.860 --> 0:01:39.629
<v Speaker 1>credit card? I

0:01:39.639 --> 0:01:41.680
<v Speaker 2>particularly like the cash back category. So

0:01:42.169 --> 0:01:43.019
<v Speaker 2>credit card. Ok.

0:01:43.029 --> 0:01:46.919
<v Speaker 1>So you think that that's like the best for your lifestyle,

0:01:46.989 --> 0:01:51.330
<v Speaker 1>your preferred spending habit, correct? What is your spending habit

0:01:51.339 --> 0:01:54.419
<v Speaker 1>on that card? And how do you then divide your

0:01:54.430 --> 0:01:55.660
<v Speaker 1>spending between cash and

0:01:55.669 --> 0:02:00.239
<v Speaker 2>credit? I have quite consistent spend every month and typically

0:02:00.250 --> 0:02:04.430
<v Speaker 2>it's around like necessities. Secondly, I'm a hassle free person

0:02:04.440 --> 0:02:04.839
<v Speaker 2>not to

0:02:04.849 --> 0:02:05.620
<v Speaker 1>be that kind of

0:02:05.900 --> 0:02:06.160
<v Speaker 2>person

0:02:07.180 --> 0:02:09.979
<v Speaker 2>and being hassle free. I just prefer my rewards to

0:02:09.990 --> 0:02:12.619
<v Speaker 2>be a cash back, which is a cash rebate and

0:02:12.630 --> 0:02:14.649
<v Speaker 2>I don't have to be worried that I don't redeem

0:02:14.660 --> 0:02:18.529
<v Speaker 2>the cash rebate because it's automatically offset. Whereas certain categories

0:02:18.538 --> 0:02:22.179
<v Speaker 2>like air miles or reward points, you have to remember

0:02:22.380 --> 0:02:26.758
<v Speaker 2>to redeem it. Imagine doing all that work and forgetting

0:02:26.770 --> 0:02:27.169
<v Speaker 2>to redeem

0:02:27.179 --> 0:02:29.279
<v Speaker 1>it. Yeah, it sounds like a very simple task and

0:02:29.288 --> 0:02:31.070
<v Speaker 1>that's how they sell it to you as well,

0:02:31.300 --> 0:02:33.080
<v Speaker 1>but it actually is a lot of work and you

0:02:33.089 --> 0:02:36.570
<v Speaker 1>miss the deadline. That's it. Exactly. You lose all your

0:02:36.580 --> 0:02:38.509
<v Speaker 1>accumulated points in miles.

0:02:38.520 --> 0:02:41.539
<v Speaker 2>I know personally of people who would build their own

0:02:41.550 --> 0:02:45.948
<v Speaker 2>kind of like spreadsheets to calculate how many rewards from, like,

0:02:45.960 --> 0:02:47.669
<v Speaker 2>4 to 5 different credit cards.

0:02:48.000 --> 0:02:48.928
<v Speaker 2>But that's not me.

0:02:49.110 --> 0:02:51.639
<v Speaker 1>I don't, yeah, I don't have time to update my

0:02:51.649 --> 0:02:53.820
<v Speaker 1>personal spreadsheet, let alone for four credit

0:02:53.830 --> 0:02:56.448
<v Speaker 2>cards. Exactly. But I think to be fair from the

0:02:56.460 --> 0:03:00.059
<v Speaker 2>stories and experiences of my friends in the initial years

0:03:00.100 --> 0:03:02.779
<v Speaker 2>is to get into the habit, you may miss one

0:03:02.788 --> 0:03:04.630
<v Speaker 2>or two rewards and everything. But

0:03:04.889 --> 0:03:08.179
<v Speaker 2>what I heard from my friend's personal account is they

0:03:08.190 --> 0:03:10.380
<v Speaker 2>took like maybe a year and year and a half

0:03:10.389 --> 0:03:12.470
<v Speaker 2>to build up their habit. But once it becomes a

0:03:12.479 --> 0:03:14.609
<v Speaker 2>bit of a muscle memory, I heard that on a

0:03:14.619 --> 0:03:17.050
<v Speaker 2>weekly basis it doesn't take too much time.

0:03:17.869 --> 0:03:20.750
<v Speaker 1>They must have a different brain function that I don't

0:03:20.758 --> 0:03:24.100
<v Speaker 1>have so different cards have different rewards and there are

0:03:24.110 --> 0:03:26.918
<v Speaker 1>just so many to choose from it. Boggles my mind.

0:03:27.229 --> 0:03:30.698
<v Speaker 1>Am I really losing out if I don't own a

0:03:30.710 --> 0:03:34.580
<v Speaker 1>credit card with some kind of reward pack to it?

0:03:35.070 --> 0:03:37.500
<v Speaker 2>If you're going to spend on something anyway, you should

0:03:37.509 --> 0:03:40.089
<v Speaker 2>definitely have at least one credit card. Lah. Because you're

0:03:40.100 --> 0:03:43.050
<v Speaker 2>going to spend, you might as well maximize your spending right?

0:03:43.059 --> 0:03:44.259
<v Speaker 2>And spend more effectively

0:03:44.270 --> 0:03:45.860
<v Speaker 1>reward yourself with that spending.

0:03:46.014 --> 0:03:48.955
<v Speaker 2>Yeah, if you're going to spend on like necessities, you

0:03:48.964 --> 0:03:51.434
<v Speaker 2>might as well have one credit card. But if, let's

0:03:51.445 --> 0:03:53.134
<v Speaker 2>say on the other spectrum, if you're only going to

0:03:53.145 --> 0:03:55.585
<v Speaker 2>spend the X amount and because you're looking at all

0:03:55.595 --> 0:03:57.755
<v Speaker 2>the different credit card points and you end up having

0:03:57.764 --> 0:04:00.705
<v Speaker 2>like four or five credit cards and you end up

0:04:00.755 --> 0:04:04.054
<v Speaker 2>racking up like maybe two or three what you actually

0:04:04.065 --> 0:04:04.845
<v Speaker 2>wanted to spend

0:04:05.059 --> 0:04:07.179
<v Speaker 2>then as you said, you know, it's a double edged sword,

0:04:07.250 --> 0:04:08.070
<v Speaker 2>not so good.

0:04:08.259 --> 0:04:10.889
<v Speaker 1>Ok, so say I'm shopping around for a credit card,

0:04:10.899 --> 0:04:13.800
<v Speaker 1>so many out there, right? And to help me choose one,

0:04:13.960 --> 0:04:17.670
<v Speaker 1>a big reference point tends to be without a doubt

0:04:17.678 --> 0:04:21.589
<v Speaker 1>the benefits, the perks, the rewards, right? So in your experience,

0:04:21.600 --> 0:04:24.678
<v Speaker 1>how do people choose a card? So for instance, I

0:04:24.690 --> 0:04:27.950
<v Speaker 1>have one that has say my mortgage loan on it

0:04:27.959 --> 0:04:30.399
<v Speaker 1>with the bank or I open a fixed deposit account

0:04:30.410 --> 0:04:30.929
<v Speaker 1>with them.

0:04:31.170 --> 0:04:33.190
<v Speaker 1>Should I do more work and find out about the

0:04:33.200 --> 0:04:36.790
<v Speaker 1>benefits and perks and making sure that everything sort of

0:04:36.799 --> 0:04:40.690
<v Speaker 1>harmonizes in my sort of credit card ecosystem.

0:04:40.859 --> 0:04:43.730
<v Speaker 2>I think that's the ideal case, but in reality, like

0:04:43.738 --> 0:04:45.630
<v Speaker 2>we said, it takes a lot of work to get there.

0:04:45.640 --> 0:04:48.308
<v Speaker 2>I think we can follow a very simple like just

0:04:48.320 --> 0:04:52.519
<v Speaker 2>three steps first, evaluating spending habits and amount. Secondly, ask

0:04:52.529 --> 0:04:56.339
<v Speaker 2>ourselves a very honest question, right? Everyone likes to be rewarded,

0:04:56.350 --> 0:04:58.239
<v Speaker 2>ascertain what kind of rewards that you like?

0:04:58.559 --> 0:05:00.488
<v Speaker 2>I think a lot of Singaporeans, they love to travel.

0:05:00.500 --> 0:05:03.130
<v Speaker 2>It's nothing wrong to, to rack up air miles and

0:05:03.140 --> 0:05:05.988
<v Speaker 2>to fly for free. Some people even have like goals

0:05:06.000 --> 0:05:08.500
<v Speaker 2>to fly business class to a certain destination. Yeah, I

0:05:08.510 --> 0:05:10.649
<v Speaker 1>know someone who has actually written a guide book on

0:05:10.660 --> 0:05:12.600
<v Speaker 1>how to chase air miles on credit

0:05:12.609 --> 0:05:16.399
<v Speaker 2>cards. I probably know that person too. But and once

0:05:16.410 --> 0:05:19.140
<v Speaker 2>you ascertain these two things, then you go into comparing

0:05:19.149 --> 0:05:21.820
<v Speaker 2>what kind of card. So for example, if it's cash

0:05:21.829 --> 0:05:24.899
<v Speaker 2>back air miles or say rewards within that category go

0:05:24.910 --> 0:05:25.928
<v Speaker 2>and compare and

0:05:26.200 --> 0:05:28.410
<v Speaker 2>I think simply put to compare, just take note of

0:05:28.420 --> 0:05:31.820
<v Speaker 2>three things. One is the reward terms and conditions. So

0:05:31.829 --> 0:05:35.410
<v Speaker 2>this first bucket is where we have to open our

0:05:35.420 --> 0:05:37.290
<v Speaker 2>eyes a little bit more to look at the best

0:05:37.299 --> 0:05:40.329
<v Speaker 2>kind of reward currency. For example, if you are in

0:05:40.339 --> 0:05:43.700
<v Speaker 2>for cash back, right? I'm looking at $1 spend equals

0:05:43.709 --> 0:05:47.809
<v Speaker 2>to how many percent cash back, right? That reward currency. Secondly,

0:05:47.820 --> 0:05:52.850
<v Speaker 2>there are maximum caps and minimum spending. So for example,

0:05:52.859 --> 0:05:53.390
<v Speaker 2>if I only

0:05:53.463 --> 0:05:58.022
<v Speaker 2>spend $500 right? But the minimum spend is $1000 right?

0:05:58.032 --> 0:06:01.452
<v Speaker 2>Then I don't, yeah, I lose out thirdly it's expiry

0:06:01.463 --> 0:06:05.102
<v Speaker 2>of points, right? Some have no expiry date, others have.

0:06:05.442 --> 0:06:07.832
<v Speaker 2>Um So in that ecosystem, I think when you're comparing

0:06:07.842 --> 0:06:10.553
<v Speaker 2>rewards terms and conditions, those are the few things they

0:06:10.562 --> 0:06:13.812
<v Speaker 2>have to look at. Second thing is around fees. So

0:06:13.822 --> 0:06:16.702
<v Speaker 2>there's very popular question people always ask, do I have

0:06:16.713 --> 0:06:19.812
<v Speaker 2>to pay annual fees for my credit card? And when

0:06:19.822 --> 0:06:20.522
<v Speaker 2>you compare

0:06:20.726 --> 0:06:23.776
<v Speaker 2>are cards that allow you for free waiver first two years,

0:06:23.786 --> 0:06:26.325
<v Speaker 2>if you are a kind of hassle free kind like myself.

0:06:26.335 --> 0:06:28.485
<v Speaker 2>I will go for these kind of cards, whereas there

0:06:28.496 --> 0:06:31.906
<v Speaker 2>are other cards that are annual fee compulsory, but nobody

0:06:31.915 --> 0:06:34.036
<v Speaker 2>really knows whether you can call the bank and get

0:06:34.045 --> 0:06:35.735
<v Speaker 2>them waived or not. A lot of them try.

0:06:35.746 --> 0:06:39.055
<v Speaker 1>I spoke with someone recently about using a credit card

0:06:39.265 --> 0:06:44.175
<v Speaker 1>for groceries for everyday spending. And this person told me

0:06:44.246 --> 0:06:47.246
<v Speaker 1>not to do that. It's a very slippery slope once

0:06:47.255 --> 0:06:47.914
<v Speaker 1>you do that.

0:06:48.178 --> 0:06:51.940
<v Speaker 1>But you're also coming from the camp of having the

0:06:51.950 --> 0:06:55.869
<v Speaker 1>cash back card. What do you say about that comment?

0:06:55.880 --> 0:06:56.209
<v Speaker 1>Is there

0:06:56.220 --> 0:06:57.510
<v Speaker 2>any reason why is it?

0:06:58.428 --> 0:07:01.479
<v Speaker 1>I think it was more to do with when you

0:07:01.488 --> 0:07:03.828
<v Speaker 1>use a credit card for everyday spending and you get

0:07:03.839 --> 0:07:07.109
<v Speaker 1>the cash back on that the reward versus the

0:07:07.515 --> 0:07:09.454
<v Speaker 1>actual spend didn't add up or something

0:07:09.464 --> 0:07:11.535
<v Speaker 2>like that. Ok. So I use my cash back credit

0:07:11.545 --> 0:07:14.475
<v Speaker 2>card for everyday spend. And I think what your friend

0:07:14.484 --> 0:07:17.415
<v Speaker 2>is saying is true, right? But that's on one spectrum

0:07:17.424 --> 0:07:20.114
<v Speaker 2>that you want to optimize to get the best kind

0:07:20.125 --> 0:07:22.334
<v Speaker 2>of cash back and the best kind of rewards in

0:07:22.345 --> 0:07:24.643
<v Speaker 2>that sense, maybe a cash back card is not so good.

0:07:24.654 --> 0:07:26.785
<v Speaker 2>Maybe a rewards points, credit card

0:07:27.010 --> 0:07:30.109
<v Speaker 2>which gives you actually more points that you have flexibility

0:07:30.119 --> 0:07:33.290
<v Speaker 2>to choose what kind of like products or vouchers to

0:07:33.299 --> 0:07:36.859
<v Speaker 2>redeem that might be better. So when I got into

0:07:36.869 --> 0:07:39.649
<v Speaker 2>a cash back credit card for everyday spend, I'm actually

0:07:39.660 --> 0:07:43.140
<v Speaker 2>not in the market for like the best currency. It's

0:07:43.149 --> 0:07:45.489
<v Speaker 2>more for the ease, right? As long as my cash

0:07:45.549 --> 0:07:47.589
<v Speaker 2>back is average, it's not the lousiest, it's not the

0:07:47.600 --> 0:07:48.959
<v Speaker 2>best that's suitable

0:07:48.970 --> 0:07:51.179
<v Speaker 1>for me. Ok, so you are. No man in the.

0:07:55.899 --> 0:07:59.040
<v Speaker 1>Hello, everyone. My name is Christina and I'm Adrian and

0:07:59.049 --> 0:08:01.459
<v Speaker 1>we're the host of a podcast called Work It if

0:08:01.470 --> 0:08:03.459
<v Speaker 1>you never heard of it. Well, it's a good time

0:08:03.470 --> 0:08:06.269
<v Speaker 1>to tap in, in the last three episodes. We've discussed

0:08:06.279 --> 0:08:09.420
<v Speaker 1>topics like how to negotiate for a salary increase or

0:08:09.429 --> 0:08:12.019
<v Speaker 1>how to get along with younger colleagues who have different

0:08:12.029 --> 0:08:13.010
<v Speaker 1>values from you.

0:08:13.220 --> 0:08:16.790
<v Speaker 1>Incidentally, it is our top performing episode if work consumes

0:08:16.799 --> 0:08:19.339
<v Speaker 1>your life and you want some perspective on issues like

0:08:19.350 --> 0:08:23.679
<v Speaker 1>management stress, even office romance. This podcast should be on

0:08:23.690 --> 0:08:27.220
<v Speaker 1>your list. A new episode drops every Monday. Catch us

0:08:27.230 --> 0:08:30.450
<v Speaker 1>on the CN A app or wherever you get your podcast.

0:08:32.849 --> 0:08:36.099
<v Speaker 1>Ok. So let's go back a little bit to what

0:08:36.109 --> 0:08:38.729
<v Speaker 1>you were talking about that annual fee. You talked about

0:08:38.739 --> 0:08:42.199
<v Speaker 1>how some credit card companies offer, like a one year

0:08:42.210 --> 0:08:45.130
<v Speaker 1>or two year annual fee waiver. And then there are

0:08:45.140 --> 0:08:47.270
<v Speaker 1>some that don't. And then we try our luck as

0:08:47.280 --> 0:08:50.780
<v Speaker 1>customers are the annual fees even worth paying for in

0:08:50.789 --> 0:08:50.869
<v Speaker 1>the

0:08:50.880 --> 0:08:53.489
<v Speaker 2>first place. It depends. But I would say as a

0:08:53.500 --> 0:08:57.489
<v Speaker 2>blanket rule, the fee paying cards have better benefits than

0:08:57.500 --> 0:09:00.979
<v Speaker 2>the non fee pay. Oh, interesting. Right. The annual fee

0:09:00.989 --> 0:09:02.229
<v Speaker 2>is predominantly there.

0:09:02.494 --> 0:09:04.664
<v Speaker 2>The maintenance of the credit card benefits and some of

0:09:04.674 --> 0:09:06.914
<v Speaker 2>the operations around it also, it adds on to the

0:09:06.924 --> 0:09:10.074
<v Speaker 2>prestige of the credit card that's on one side. But

0:09:10.085 --> 0:09:12.164
<v Speaker 2>on the other side is if you have a fee

0:09:12.174 --> 0:09:16.604
<v Speaker 2>bank card and you don't utilize those benefits, it is

0:09:16.614 --> 0:09:17.465
<v Speaker 2>also wasted.

0:09:17.474 --> 0:09:20.034
<v Speaker 1>Of course, then you're paying upwards of 90 to 100

0:09:20.044 --> 0:09:22.934
<v Speaker 1>and $20 per year for something that's just going to

0:09:22.945 --> 0:09:24.414
<v Speaker 1>collect dust in your wallet. And

0:09:24.424 --> 0:09:26.983
<v Speaker 2>when you use it for a fancy meal meal, one

0:09:27.075 --> 0:09:27.734
<v Speaker 2>time purchase,

0:09:27.755 --> 0:09:31.565
<v Speaker 1>how many is too many when it comes to credit cards?

0:09:31.575 --> 0:09:31.864
<v Speaker 1>Because

0:09:32.340 --> 0:09:34.940
<v Speaker 1>I know of people who actually get a kick out

0:09:34.950 --> 0:09:39.450
<v Speaker 1>of maximizing the rewards of each credit card they own.

0:09:39.460 --> 0:09:41.469
<v Speaker 1>I know someone who has four. I know someone who

0:09:41.479 --> 0:09:43.760
<v Speaker 1>has six and then there's people like you and me,

0:09:43.770 --> 0:09:46.390
<v Speaker 1>we only have one. Where do you stand on

0:09:46.400 --> 0:09:48.049
<v Speaker 2>this? I think based on the data point that I

0:09:48.059 --> 0:09:52.299
<v Speaker 2>saw done by you gov in 2019, that research actually

0:09:52.309 --> 0:09:55.809
<v Speaker 2>says that more than three quarters of Singaporeans

0:09:55.905 --> 0:09:59.574
<v Speaker 2>have at least one credit card and slightly more than

0:09:59.585 --> 0:10:05.294
<v Speaker 2>half 50% of Singaporeans have two credit cards. Only about 10%

0:10:05.304 --> 0:10:07.744
<v Speaker 2>have six cards or more. So that kind of frames

0:10:07.755 --> 0:10:11.554
<v Speaker 2>your question. The deal hunters or what I call the power.

0:10:11.565 --> 0:10:14.444
<v Speaker 2>Users of credit cards are probably like 10 15%. It

0:10:14.455 --> 0:10:18.364
<v Speaker 2>really depends on your preference. Right? There's always an opportunity

0:10:18.375 --> 0:10:19.414
<v Speaker 2>cost between

0:10:19.669 --> 0:10:24.500
<v Speaker 2>maximizing the benefits and the time invested. I always like

0:10:24.510 --> 0:10:27.659
<v Speaker 2>to add one more aspect to consideration. Is,

0:10:27.890 --> 0:10:31.569
<v Speaker 2>is the credit card helping you spend effectively or is

0:10:31.580 --> 0:10:33.859
<v Speaker 2>it egging you to spend more? If it's egging you

0:10:33.869 --> 0:10:37.059
<v Speaker 2>to spend more, it could lead to unhealthy spending habits.

0:10:37.070 --> 0:10:39.858
<v Speaker 1>So your team want credit card, as I said earlier,

0:10:39.869 --> 0:10:42.319
<v Speaker 1>would you go for a second credit card? Do you

0:10:42.330 --> 0:10:42.820
<v Speaker 1>think in the

0:10:42.830 --> 0:10:44.950
<v Speaker 2>future? I think it's a good question. The answer is

0:10:44.960 --> 0:10:49.020
<v Speaker 2>likely to be yes reason because travel has reopened up. Right.

0:10:49.030 --> 0:10:51.839
<v Speaker 2>And being a cash back reward person, I'm only earning

0:10:51.849 --> 0:10:54.020
<v Speaker 2>cash back from my spend. Right. But if I'm planning,

0:10:54.030 --> 0:10:55.880
<v Speaker 2>let's say a big trip a couple of years later

0:10:56.200 --> 0:10:58.390
<v Speaker 2>and air miles credit card would be good. And I

0:10:58.400 --> 0:11:00.969
<v Speaker 2>know for a fact that most families have two or

0:11:00.979 --> 0:11:01.728
<v Speaker 2>three cards spread

0:11:01.739 --> 0:11:04.669
<v Speaker 1>across. Yeah, I was gonna ask about that as well. Yeah,

0:11:04.679 --> 0:11:07.950
<v Speaker 1>the families operate differently. So then they will have different

0:11:07.960 --> 0:11:09.969
<v Speaker 1>credit card for different types of expenses. It's very

0:11:09.979 --> 0:11:12.469
<v Speaker 2>fair to have one cash back card and maybe an

0:11:12.479 --> 0:11:15.330
<v Speaker 2>air miles or rewards card to actually rack up both

0:11:15.340 --> 0:11:16.690
<v Speaker 2>sides of the rewards.

0:11:16.719 --> 0:11:21.750
<v Speaker 1>Ok. Buy us aside if I were to have one

0:11:21.760 --> 0:11:23.919
<v Speaker 1>credit card to rule them all,

0:11:24.450 --> 0:11:27.099
<v Speaker 1>I kind of think I know the answer to this one.

0:11:27.109 --> 0:11:29.500
<v Speaker 1>Which kind should I go for in terms of the

0:11:29.510 --> 0:11:33.849
<v Speaker 1>overall reward, let's say I'm someone who shops quite a

0:11:33.859 --> 0:11:36.939
<v Speaker 1>fair bit. I like my fashion, but I also need

0:11:36.950 --> 0:11:40.640
<v Speaker 1>it for certain household expenditures. What would be the best

0:11:40.650 --> 0:11:45.130
<v Speaker 1>overall card for someone whose spending habits are similar to mine?

0:11:45.190 --> 0:11:45.320
<v Speaker 1>I

0:11:45.330 --> 0:11:48.189
<v Speaker 2>would think if there's only one card to rule them all,

0:11:48.200 --> 0:11:51.440
<v Speaker 2>probably a reward points card would be good

0:11:51.525 --> 0:11:54.405
<v Speaker 2>because the whole value proposition of a rewards points card

0:11:54.414 --> 0:11:57.505
<v Speaker 2>is it's flexible that reward points that you accumulate with

0:11:57.515 --> 0:12:01.895
<v Speaker 2>the bank's reward catalog allows you to get rebates or

0:12:01.905 --> 0:12:06.824
<v Speaker 2>vouchers or redeem products even transfer those points into air

0:12:06.835 --> 0:12:09.815
<v Speaker 2>miles if you want to travel. But just one thing

0:12:09.825 --> 0:12:14.044
<v Speaker 2>to take note how appealing the reward points is really

0:12:14.054 --> 0:12:16.414
<v Speaker 2>depending on how appealing the catalog is.

0:12:16.424 --> 0:12:18.515
<v Speaker 1>Of course, because if it's going to give me

0:12:18.739 --> 0:12:22.319
<v Speaker 1>brands or products that I don't typically use and what's

0:12:22.330 --> 0:12:25.570
<v Speaker 1>the point, right? Ok. So one thing that we've seen

0:12:25.580 --> 0:12:31.789
<v Speaker 1>an increase of is the number of alternative payment methods. Obviously,

0:12:31.799 --> 0:12:34.760
<v Speaker 1>I'm talking about buy now pay later schemes, right? These

0:12:34.770 --> 0:12:38.869
<v Speaker 1>are apps that allow you to break up large amounts

0:12:38.880 --> 0:12:43.239
<v Speaker 1>into smaller payments, more manageable payments usually in installments of

0:12:43.250 --> 0:12:44.090
<v Speaker 1>three months, right?

0:12:44.450 --> 0:12:48.770
<v Speaker 1>Are there any risks associated with these methods that could

0:12:48.780 --> 0:12:52.280
<v Speaker 1>actually put good old credit cards out of business?

0:12:52.590 --> 0:12:54.890
<v Speaker 2>I don't think buy now pay later would put the

0:12:54.900 --> 0:12:58.289
<v Speaker 2>traditional credit card players out of business simply because credit

0:12:58.299 --> 0:13:01.780
<v Speaker 2>cards also allow one to take an installment payment plan

0:13:01.789 --> 0:13:05.329
<v Speaker 2>for big purchases for much longer too. Exactly, for much

0:13:05.340 --> 0:13:08.150
<v Speaker 2>longer for buy. Now pay later, it's a different kind

0:13:08.159 --> 0:13:11.449
<v Speaker 2>of mechanism other than using credit cards. And not everyone

0:13:11.460 --> 0:13:15.400
<v Speaker 2>would get into the behavior of downloading something new to

0:13:15.409 --> 0:13:18.020
<v Speaker 2>split the payment into two or three. Even though I

0:13:18.030 --> 0:13:20.760
<v Speaker 2>think nowadays is very popular, there are a lot of incentives.

0:13:20.770 --> 0:13:22.020
<v Speaker 2>My fear is that

0:13:22.250 --> 0:13:24.059
<v Speaker 2>a lot of the people that they can buy now

0:13:24.070 --> 0:13:26.950
<v Speaker 2>pay later are maybe not the ones that have a

0:13:26.960 --> 0:13:31.450
<v Speaker 2>very high purchasing power. Right. So that facility actually is

0:13:31.460 --> 0:13:34.830
<v Speaker 2>more beneficial or speaks to people in that category slightly

0:13:34.840 --> 0:13:37.700
<v Speaker 2>better than credit cards, right? Whereas credit cards have a

0:13:37.710 --> 0:13:41.590
<v Speaker 2>more holistic benefit rewards are not just one of the benefits,

0:13:41.599 --> 0:13:45.809
<v Speaker 2>you know, miles card come with premier kind of travel loungers,

0:13:45.820 --> 0:13:48.780
<v Speaker 2>all these like auxiliary benefits which appeal to a lot

0:13:48.789 --> 0:13:49.469
<v Speaker 2>of people

0:13:50.090 --> 0:13:53.108
<v Speaker 1>French benefits. Of course, they count as well. Exactly is

0:13:53.119 --> 0:13:56.099
<v Speaker 1>not owning a credit card at all an option.

0:13:56.109 --> 0:13:59.319
<v Speaker 2>That's a good question. I've got some of these questions before.

0:13:59.330 --> 0:14:02.260
<v Speaker 2>I think it's practical to at least have one credit card.

0:14:02.270 --> 0:14:04.380
<v Speaker 2>And these are some of my reasons. Right. Firstly, we

0:14:04.390 --> 0:14:07.559
<v Speaker 2>go back to spending effectively. If you're going to spend,

0:14:07.570 --> 0:14:09.950
<v Speaker 2>you might as well get some rewards. Secondly, having a

0:14:09.960 --> 0:14:13.630
<v Speaker 2>credit card actually builds up your credit score. Right? Yes. Right.

0:14:13.640 --> 0:14:17.229
<v Speaker 2>Especially for new to credit card users. And thirdly it

0:14:17.239 --> 0:14:17.738
<v Speaker 2>helps you

0:14:17.929 --> 0:14:19.690
<v Speaker 2>is your cash flow or it gives you a higher

0:14:19.700 --> 0:14:22.760
<v Speaker 2>purchasing power. Say for example, you bought a new place

0:14:22.770 --> 0:14:25.150
<v Speaker 2>and you need to buy a furniture and lastly it's

0:14:25.159 --> 0:14:27.659
<v Speaker 2>convenient and it's accessible. I mean, you can't do any

0:14:27.669 --> 0:14:31.460
<v Speaker 2>e-commerce shopping without a credit card much nowadays. Right. So

0:14:31.469 --> 0:14:34.830
<v Speaker 2>I think all these advantages warrant at least one in

0:14:34.840 --> 0:14:35.820
<v Speaker 2>my opinion. My final

0:14:35.830 --> 0:14:38.739
<v Speaker 1>question to you before I let you go. Is there

0:14:38.750 --> 0:14:42.099
<v Speaker 1>such a thing as a bad credit card to get?

0:14:42.169 --> 0:14:45.679
<v Speaker 2>Probably first time somebody has asked me that bad credit card.

0:14:45.909 --> 0:14:48.239
<v Speaker 2>I don't think there is a bad credit card per se,

0:14:48.250 --> 0:14:51.700
<v Speaker 2>but I think what is not a good use of

0:14:51.710 --> 0:14:54.469
<v Speaker 2>credit card is just to get it for the sign

0:14:54.479 --> 0:14:57.280
<v Speaker 2>up bonus. And let's say if you forget to make

0:14:57.289 --> 0:15:01.679
<v Speaker 2>certain payments and you end up incurring fees that you

0:15:01.690 --> 0:15:05.270
<v Speaker 2>can't waive off and you're just having that like thick

0:15:05.280 --> 0:15:09.270
<v Speaker 2>many plastics in the wallet, right? Which actually rack up

0:15:09.280 --> 0:15:12.250
<v Speaker 2>fees that you don't know of. I think that would

0:15:12.260 --> 0:15:14.440
<v Speaker 2>be a bad behavior. Not so much of a bad

0:15:14.450 --> 0:15:14.750
<v Speaker 2>credit

0:15:14.760 --> 0:15:15.760
<v Speaker 1>card. Right?

0:15:16.950 --> 0:15:20.460
<v Speaker 1>Didn't mom and dad warn you about the dangers of

0:15:20.469 --> 0:15:25.179
<v Speaker 1>credit cards? Mine certainly did. But if you're a rewards

0:15:25.190 --> 0:15:28.500
<v Speaker 1>king or queen and you're able to keep those credit

0:15:28.510 --> 0:15:31.479
<v Speaker 1>card bills in tip top shape, then go ahead and

0:15:31.489 --> 0:15:34.390
<v Speaker 1>burn that plastic. But if it's just too much of

0:15:34.400 --> 0:15:37.840
<v Speaker 1>a hassle know that there are singular options for you,

0:15:37.849 --> 0:15:42.059
<v Speaker 1>including not owning one at all. Thanks very much

0:15:42.474 --> 0:15:45.505
<v Speaker 1>for laying out all the cards on the table and

0:15:45.515 --> 0:15:49.265
<v Speaker 1>seeing which ones I was playing or in this case. Hey,

0:15:49.494 --> 0:15:52.094
<v Speaker 1>and thanks to you, our listener. If you've enjoyed this

0:15:52.104 --> 0:15:55.284
<v Speaker 1>episode of Money Talks, there's more content for you to enjoy.

0:15:55.294 --> 0:15:58.224
<v Speaker 1>Just follow us on Apple podcast or Spotify and give

0:15:58.234 --> 0:16:01.215
<v Speaker 1>us five stars or leave a review. The team behind

0:16:01.224 --> 0:16:06.114
<v Speaker 1>Money Talks is Jacqueline Chan, Joanne Chan, Christina Robert and

0:16:06.125 --> 0:16:06.984
<v Speaker 1>I'm Andrea Ha.